Medallion Metals (ASX:MM8) has completed a Prefeasibility Study (PFS) at its flagship Ravensthorpe Gold Project (RGP), located 550km southeast of Perth in Western Australia.
The completion of the PFS represents a significant de-risking milestone for the Ravensthorpe Gold Project.
With preproduction capex of $163 million and net revenue of $2.424 billion after treatment, refining, and logistics, and a project life of 9 years, Medallion says the results confirm a technically and commercially robust development opportunity offering attractive returns on investment.
All PFS results are reported from modelling of mining and processing of existing mineral resources situated at the Kundip Mining Centre (KMC and the project).
The company says the ‘favourable’ cost structure both in AISC ($1,577/oz) and AIC ($1,912/oz) terms provides leverage to the Australian dollar gold price, which is currently trading at or near record levels.
Coupled with multiple opportunities to enhance project returns through resource growth and new discovery, RGP is progressing into a ‘unique’ greenfield gold development asset in a tier-one jurisdiction.
Critical work streams to advance KMC toward Final Investment Decision (FID) include conversion of production inventory derived from inferred resources to indicated category; ongoing testwork including metallurgical, geotechnical, and hydrogeological to support a Bankable Feasibility Study (BFS); and, progression of environmental permitting with focus on primary approvals at state and federal levels.
Mineral resource conversion at KMC is estimated to require about 30,000m-35,000m of new diamond and reverse circulation drilling (infill drill program) over a 12-month period leading to an updated MRE.
Medallion expects the MRE would grow both in terms of size and confidence upon completion of the infill drill program. The updated MRE would then form the basis of a BFS which in combination with other factors would inform the Board’s assessment of a FID.
Completion of all work streams to FID is dependent upon securing funding. Using the PFS as a case to support funding options that are non-dilutive to shareholders, Medallion has initiated a process to identify funding alternatives that may either fully or partially fund the company’s progression to FID.
This initiative is expected to extend over a 6-month period. In the near term, Medallion anticipates releasing an updated Ore Reserve Estimate (ORE) underpinned by the findings of the PFS.
An exploration target will also be released outlining the growth potential of KMC at depth and along strike for the known deposits within KMC. Both these initiatives are expected to be delivered prior to the end of the calendar year.
Medallion will also continue to pursue low capital intensity de-risking and growth activities that are achievable with existing financial resources. This includes advancing permits and progression of some elements of the additional testwork recommended by key consultants.
A close spaced drill program will be undertaken over a constrained area at the Gem deposit to optimise grade control drill spacing and assay methodology for planning and budgeting purposes, while also providing advance data collection to support a future BFS and to improve confidence for capital providers. Priority extensional targets within KMC will be drill tested.
Medallion notes that regional exploration targets will continue to be advanced and permitted. In addition, the company will continue to pursue options to realise value of its non-core assets.
“It is clear confirmation of Medallion’s strategy to continue to both grow and de-risk project resources remaining at all times focussed on discovering and proving up economic metal“
Managing Director Paul Bennett says the PFS completion represents a significant milestone for the business as it continues to demonstrate that Ravensthorpe is an asset of scale and significance with enormous potential.
“After a period focused on resource growth, the team has now demonstrated that the gold and copper opportunity at Ravensthorpe can be commercialised using industry standard processes and techniques.
It is clear confirmation of Medallion’s strategy to continue to both grow and de-risk project resources remaining at all times focussed on discovering and proving up economic metal. We expect further growth in the size and confidence of resources as we plan more drilling throughout 2023 and 2024 both at Kundip and across our highly prospective and undertested tenement package.
The company is now well advanced on a trajectory to achieve critical mass to support the development of a long-life, low-cost gold and copper business in Ravensthorpe.”
Write to Adam Orlando at Mining.com.au
Images: Medallion Metals
